The carbon markets that constitute the default international approach to the climate crisis, argues this article in the latest Socialist Register, aim both at opening up new frontiers for profit-making and at securing the background conditions for accumulation that are currently threatened by calls for greenhouse gas emission cuts. But they are afflicted by valuation paradoxes that are far more intractable than those affecting markets in other commodities such as food, energy, consumer durables, or even complex financial derivatives. The article is supplemented with a short interview with New Left Project's Ed Lewis.

The carbon markets operating today under the aegis of the UN, the EU, and a variety of state and non-state actors are the default international approach to the climate crisis. Reflecting, extending and deepening neoliberalism, these markets grew rapidly until 2008, when they began to stumble, following the financial crash, the 2010 failure of the US Congress to pass proposed carbon trading legislation, uncertainty about the future of UN climate treaties, and a recent spate of criminal and other scandals.

This article explains how carbon commodities work through a process of radical disembedding – in particular, through disembedding the climate issue from the historical question of how to organise for structural, long-term change aimed at keeping remaining fossil fuels in the ground. Like other ecosystem services markets, carbon markets aim at “creating and stabilizing new areas for capitalist activity”, but also, more fundamentally, at securing those background conditions for accumulation that are most dependent on fossil fuels and most threatened by calls for emission cuts.

The valuation paradoxes that afflict climate commodities, however, are even more intractable than those that affect complex financial derivatives, to say nothing of more familiar commodities like ordinary futures or food, energy, and consumer durables. To understand why, it is necessary to explore in some detail the peculiar algebra through which the climate commodity is created.